on Jun 3 2014
We spend zero money on marketing, everything is organic. Our customers get really frustrated managing their Airbnb accounts themselves, so when they hear about us they sign up immediately. Word of mouth is working really well for us. These evangelists in tandem with press continue to push our user numbers up and up.
The the lifetime value of a customer really depends on the type of customer. Someone renting their room all year round is different than another only renting when they’re on vacation. If we take the average of these two users, the value of each of our customers is around $1,500 for a year and a half. We believe this number will grow significantly with the amount of guest services we are going to supply and the margins we can cut from these services.
The things that keep me up at night, aren’t the problems coming up next month it’s the stuff that happened last night. If a guest has a bad experience that is troubling - we promise our customers no bad reviews. We connect with the guest during their stay to resolve any issues, and if something is wrong I take it personally and will fix it personally. We are very experienced oriented, and we like to give awesome service.
Every morning I read the emails from the previous 8 hours to see if there have been any problems. The grand vision doesn’t really worry me that much because I believe in our capabilities, that this problem needs a fix, and that SuperHost will be the one to fix it.
In five years we see ourselves as a 100% automated company. We already see customer patterns, currently 95% of our guest interaction is predictable and with time we are confident we can nail down that last 5%. We’ll then be able to build a system that can respond to guest questions and inquiries automatically with data we’ve scraped from their information. The way I see it, in the future we’ll be able to address concerns in less than seconds - we might even have to hold responses so customers believe their interacting with a human. Software can do everything we need to do, and with a personal touch. Robots, computers will enable us to remove the friction by addressing the patterns. We’re really trying to look at the hospitality market from a new point of view - which is data driven.
We then see ourselves being able to give a much better experience throughout a guest’s entire trip. This will include airport pickup, local cellphones, show tickets, restaurant recommendations and discounts based on their preferences. Eventually we’ll be the marketplace for your trip.
Our vision is in line with the vision at Airbnb - it’s not just accommodation but rather a whole trip. Guests already ask us for help with many aspects of their vacation, and we want to provide all the resources for the entire experience. This will include airport pick-up, local cellphones, tickets to local attractions and restaurant recommendations and coupons - all of which will be personalized and based on user preferences.
The market size of vacation rentals is $40 Billion, small hotels and hostels is another $40 Billion. If we get our 3% on that $80 Billion this is a $2.4 Billion opportunity. These are encouraging numbers, but all the more so because they don’t include the various other services we plan to provide - the full vacation experience that will generate a lot more revenue.
We started a version of SuperHost approximately 2.5 months ago and we already have 450 properties managed in our system (40% week-over-week growth). We also generate revenue that is growing on average 40%. These numbers don’t count people who have just signed up, only those that have onboarded and are actively working with us. 99% of users continue to utilize SuperHost and the 1% of our users who have cancelled after using us do so because of problems we aren’t able to solve. These are problems - emergencies - that would require a human on the ground.
Most of our competitors look at this as a logistics problem. While we see it as a technology problem. We like building software, have been doing so since we were 12 years old, and see this as a problem deeper than logistics that we will solve using technology. The human aspect is something we outsource, while coordinating everything with our software. This enables us to charge much less, 3% compared with 10-20%, while still organizing everything for you.
Our competitors do offer a more complete solution for 20%, with all services provided in house. They see themselves as cleaning companies, but this limits their growth to a handful of cities - while we are available across the U.S. and in several other countries with plans to expand everywhere. Our software enables us to scale much faster and concentrate on what we are really good at - managing properties and making the process more efficient for everyone.
This is why many of our competitors have since become customers. We offer the automation and efficiency that everyone else seems to be missing
I ran a retail company managing many low and high level employees, suppliers, and sales teams. This experience has really helped me as CEO coordinate this business and the partnerships necessary to help us grow. Before SuperHost my brother was working for a recently acquired startup called TapDog as their lead developer. As the CTO and head of product he is thrilled to bring his natural language processing experience to automate this entire business.
First of all our service saves clients more than two hours per booking. But there are many other areas of value we offer: the constant optimization of your profile, updating your calendar, and responding to inquiries right away, all of which push listings to the top of search results. We also see a 70% lift in bookings with much less hassle for the customer.
We can help the host do everything - get professional shots of their room, caption those photos, organize their profile, and respond to inquiries within minutes. When a host signs up we ask them a variety of questions to better understand them and work on their behalf. Questions like: what they are looking for in a guest, the minimum stay, and what activities they recommend for guests. We try our best to understand our hosts so we can provide an experience on par with their standards. Finally we take care of all logistics, from cleaning and keys to any issues that arise with the guests, and are available 24/7.
We are very focused on Airbnb right now because being awesome on one platform is much better than being mediocre on several. But in the future we foresee expanding to many platforms and across many niches of the hospitality industry.
For instance when we launched on TechCrunch we had a lot of interest from many different people outside of Airbnb. We had never considered small hotels and hostels who need someone to manage their property in the hours they’re not available. This a market that could be even bigger than the vacation rental market.
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